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Changes in Medicare/Medicaid and health Care Decision Making on a state and National Level. Alzheimer’s Association 2012 Spring Caregiver Conference. Keith P. Huffman. Advance Directives for health care Basic estate planning needs for families faced with Alzheimer’s Disease

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changes in medicare medicaid and health care decision making on a state and national level
Changes in Medicare/Medicaid and health Care Decision Making on a state and National Level

Alzheimer’s Association


Spring Caregiver Conference

Keith P. Huffman

a road map

Advance Directives for health care

  • Basic estate planning needs for families faced with Alzheimer’s Disease
  • Planning for the cost of nursing home care
  • Planning for Medicaid waiver services to allow families to age in place



a road map1

VA benefits available to help with the cost of care

  • Early onset Alzheimer’s Disease and the Social Security Compassionate Allowance Initiative
  • Caregiver Agreements and the IRS Household Employee Rules



advance directives hospital policies
Advance Directives&Hospital Policies

Under-standing Advance Directives

understanding advance directives
Understanding Advance Directives

Hospital Policies

  • AND: Allow Natural Death
  • DNR: Do Not Resuscitate
  • No-Code/Physician
    • When death is Imminent
  • Coming Soon:


Physician’s Order for Scope of Treatment

Advance Directives

  • Health Care Representative
  • Health Care Power of Attorney
  • Living Will
  • Life Prolonging Procedure Directive
  • Out of Hospital DNR
  • Psychiatric Advance Directive
  • Organ and Tissue Donation
  • Funeral Directives
health care representative and other advance directives
Health Care Representative(And other Advance Directives)
  • Directs who is to make health care decisions in the event you are unable to
    • Not a substitute for a discussion
    • Health care professionals may ask if you have a living will, but these are of little value for ongoing health care concerns.
  • Health care by committee is not a proper plan
basic estate planning needs for families faced with alzheimer s disease
Basic estate planning needs for families faced with Alzheimer’s Disease.

Using Various Instruments

testamentary instruments

Powers of Attorney

  • Wills
  • Trusts
  • Beneficiary Designation Instruments
  • Nursing Home Cost Planning
Testamentary Instruments
power of attorney most useful when it is
Power of AttorneyMost useful when it is:
  • Durable
  • Immediately Effective
  • Unlimited
  • Contains a Gifting Clause
  • Like almost everything—they have varying degrees of complexity

And Everything In-between…

wills what can make them more complex
WillsWhat can Make them More Complex?
  • Trusts
  • Special Needs Trusts
  • Pour-over Provisions
trusts common types
TrustsCommon Types
  • Inter vivos Trusts: A trust made during your lifetime.
    • Revocable Trust
    • Irrevocable Trust
    • Pour-over Trust: Receives property from a will
  • Testamentary Trust: Created under the terms of a will and does not take effect until the settlor dies
beneficiary designation instruments
Beneficiary Designation Instruments
  • Commonly: Transfer on Death or Payable on Death
    • Savings Accounts, Checking accounts, Certificates of Deposit (CDs) Most anything at a Financial Institution
  • Transfer on Death Property Act
    • Allows you to add Transfer on Death to just about anything
      • Real Estate
      • Titled Vehicles
      • Securities
nursing home cost planning
Nursing Home Cost Planning
  • In 2012, the average cost of nursing home care is $5,139.00/mo; that is on average $61,668.00/year.
  • Long Term Care insurance is a way to protect assets from the cost of nursing home care if you can afford it. However, most do not have such insurance.
  • Medicaid can also pay for care
    • A Power of Attorney is the crucial document in this planning
    • So long as that is in place, little need be done until someone needs nursing home care.




what is the deficit reduction act
What is the Deficit Reduction Act?
  • The DRA is a Federal Law that requires Indiana to change many of the current Medicaid laws
  • The Look Back Period for gifts changes from 3 years prior to application to 5 years
  • Changes the treatment of gifts and the imposition of a period of Medicaid ineligibility
  • Imposes a penalty period for any small gift or charitable donation
  • Changes the way annuities are treated
    • Requires Indiana to be named as the first beneficiary for repayment of funds paid out for the annuitant or his spouse.
  • Mom
    • Gifts $100 to 4 children at Christmas & for each birthday
    • Gifts $200 monthly to her church
    • Gifts $300 annually to United Way
      • Annual gifts $2,300 over $1,200 permitted
      • $2,300 ÷ 5,139 = .45 month penalty or 13.68 days, rounded up to 14 days
penalty start date
Penalty Start Date
  • For transfers of property after October 31, 2009, the penalty begins when:
      • Mom is in the nursing home;
      • Mom is qualified for Medicaid;
      • Mom applies for Medicaid to help pay for her care; and
      • Mom is turned down for Medicaid only because of the gift
annuity rules
Annuity Rules
  • State of Indiana must be named as the primary beneficiary unless there is:
    • A spouse
    • A minor child; or
    • A disabled child
  • If any of these are named primary, the State can be named secondary
  • Applies to all non-qualified annuities purchased on or after November 1, 2009
existing non qualified annuities
Existing Non-Qualified Annuities
  • The following transactions bring old annuities under the November 1, 2009, rules:
      • You put more money in;
      • You take some money out;
      • You change the ownership;
      • You annuitize the policy; or
      • You change the distribution of the annuity
planning for medicaid waiver services
Planning for Medicaid waiver services


the medicaid waiver program
The Medicaid Waiver Program
  • Provides Medicaid covered services in the community for those individuals who meet the financial criteria for Medicaid eligibility and meet the need for nursing home level of care. Services may include home health care, adult day care & respite care.
  • Some assisted living facilities participate in the Waiver Program.
the medicaid waiver program1
The Medicaid Waiver Program
  • The spousal impoverishment rules apply to the waiver program. This means Mom or Dad can obtain help for these expenses without having to consider nursing home care and without going broke.
va benefits available
VA benefits available


va benefits
VA Benefits
  • Aid & Attendance Award
  • Monthly Pension
  • Served 90 days in military including one day while we were at war
va benefits1
VA Benefits
  • The Aid & Attendance Award provides benefits of up to $1,703 per month to a veteran; $1,094 per month to a surviving spouse; $2,019 per month to a couple; or $2,631 to a veteran married to another veteran.  For many, this award can make the difference between a comfortable retirement and constant worries about making ends meet.
social security compassionate allowance initiative
Social Security Compassionate Allowance Initiative


ssa s compassionate allowance initiative
Ssa’S Compassionate Allowance Initiative
  • “Social Security has an obligation to provide benefits quickly to applicants whose medical conditions are so serious that their conditions obviously meet disability standards.”
  • Although applicants still have to meet other criteria to qualify for Social Security Disability (SSDI) and Supplemental Security Income (SSI), by adding Early-Onset Alzheimer's to the initiative, individuals diagnosed with Early-Onset (younger-onset) Alzheimer’s are considered eligible when it comes to the disability criterion just by the virtue of the disease.
personal service caregiver agreements
Personal Service (Caregiver) AgreementS
  • Can many times be used instead of making gifts with more benefits for all members of the family
    • Mom and Dad are much more likely to live at home.
    • Mom and Dad do not burden their children.
    • The child (daughter and/or son) providing the services is fairly compensated among the siblings.
    • Mom and Dad’s money stays in the family instead of being spent at the nursing home.
    • Compliance with all taxes and Medicaid laws
irs household employee rules
Irs household employee rules
  • Personal Service Agreements have tax implications and therefore should be prepared by an experienced Elder Law Attorney
  • Tax implications to consider:
    • Social Security Tax
    • Medicare Tax
    • Federal Withholdings
    • State Income Taxes
    • Etc.
how to plan for the future
How to Plan for the Future
  • Insist those you care for consult with an experienced Elder Law Attorney to review their current legal documents and draft new ones, if necessary.
  • Provide information to those who want to develop a plan for how to cover the cost of long term care or home care.
  • Encourage Discussion “Talk to your family/children about your wishes”.
  • Hire or Associate with a geriatric care manager for assistance with placement options and caregiving issues.